Fintech guru tells Hammond ‘I wouldn’t set up in London now’

The co-founder of one of the most successful UK-based fintech companies has told a Treasury conference he probably would not choose London again because of Brexit.

Speaking at the Department for International Trade’s international fintech conference today, Transferwise CEO and co-founder Taavet Hinrikus said the restriction on freedom of movement likely to result from Brexit meant London would see its ability to attract talent diminished. Taking the podium minutes after Chancellor Philip Hammond and Bank of England governor Mark Carney had given speeches promoting the attractions of London and the UK as a home for fintech investments, Hinrikus also pointed to the loss of the ease of operating in a market with 500m customers under a single regulator.

He said the UK had the most fintech-friendly regulator in the world and many other positive features, but argued these were being copied by other cities such as Paris, New York and Singapore looking to take a lead in fintech.
Transferwise was reportedly valued in 2016 at around £880m, and names Richard Branson as one of its investors. It has more than 1m customers worldwide and has 10 per cent market share in UK consumer foreign exchange transactions.

But Monitise founder and UK government financial services ambassador Alastair Lukies CBE argued that London would remain the world’s fintech capital because of the proximity of numerous elements essential to fintech.

Hinrikus said: “Hands down the FCA is the best regulator of fintech in the world. What is great for the UK is that it is in part of Europe. In the US we have to deal with a regulator in every state. You have a single regulator and 500 million people who can come and work easily makes this a very exciting place for immigrants like myself. However the world has changed. We are headquartered in London with more than 100 people working in Shoreditch. But if I was setting up Transferwise today I probably would not choose London.

“In the last couple of years we have seen many other countries around the world looking to the UK for inspiration when it comes to fintech. Imitation is the sincerest form of flattery and other countries are looking at the UK and what the regulator is doing here and looking to open up in ways like the fintech accelerator at the Bank of England and the FCA’s regulatory sandbox and Project Innovate and all these things are being copied from Abu Dhabi to Singapore to Korea. The competition is healthy and means better services for consumers. But it also means other cities – Paris, Berlin, Singapore, New York – are starting to think about how they can become the fintech capital of the world.”

Lukies said: “I do not agree that there is anywhere else in the world that you can spend the day sitting talking through your proposition with the regulator, then walk or get on the tube and speak to some of the world’s largest banks who are interested in distributing your technology to millions of customers around the world, and then go and see the technology in action, down at Google or Apple, and then get a 40 minute train to Heathrow and fly to any city in the world to talk about your proposition.”

Funding Circle CEO Samir Desai CBE said: “The UK is one of the few countries in the world where you can build a company like ours. The UK is a market leader in fintech partly because you have access to the talent of the disaffected people working in the existing established banking industries.”